The Renovation Equation: Does Adding On Add Up?
Many home owners who extend or renovate their homes make money when they sell, while others wonder why they have trouble getting their money back after renovating.
“Location is vital,” Todd Pearce of Page & Pearce Real Estate said. “But location aside, there are many factors that minimise the risk of over-capitalising when renovating. Home owners should consider consulting an estate agent before renovating or making improvements. In many instances agents aren’t called until the work is completed and it’s too late to put the genie back in the box.” Todd said that some renovations and alterations don’t improve the standard of the property enough to compensate for the cost of the renovations.
“Some owners sacrifice one feature when renovating to gain another thereby adding cost but not value. Frequently reported examples of this sort of renovating expenditure include turning a bedroom into a dining room or a garage into a rumpus room. Another common oversight when renovating is failing to take proper account of the scale or age of the property when adding on. It is important to make sure renovating extensions are seamlessly integrated with the original home. Many three bedroom homes don’t “work” once a fourth bedroom and family room are added – the original rooms may be too small to balance the extensions after the renovation and the original property, though in good condition, may look out-of-date beside the new. Furthermore, bad design during renovation resulting in poor natural light, an inconvenient floor plan such as a living area that ends up a long way from the kitchen, or a badly positioned bathroom will be reflected in the sale price of the property.”
He also said that some renovators over-capitalise by deviating from their budget along the way. “Many homes and locations don’t justify top-of-the-range appliances and fittings. And if renovators run out of money before completing the work or have to skimp on the finishing touches, the overall renovated effect can be disappointing and limit the ultimate selling price.”
According to Todd home owners concerned first and foremost about investment potential need to think twice before making renovations or changes for their own unique needs. “But quality of life is also important and if people stay in a property long term the cost of idiosyncratic changes will usually be absorbed in most locations. Those considering making major renovations and changes should seek advice from an estate agent with whom they have a good relationship. Builders can tell you what your renovations will cost but only an estate agent can tell you whether the renovating expenditure is justified.”
The team at Page & Pearce Real Estate are specialist in the Townsville property market and can be contacted on 4728 2199 to assist home owners with any queries on their properties regarding selling or renovations they have in mind and how these may or may not affect their properties values.